Nationwide miscalculate interest on fixed-term bond

Legacy_user

Nationwide sent me their standard letter asking me what I want to do with the proceeds when a one-year 3% ISA matures on 31 March 2010. Appallingly, they miscalculated the maturity value. They included interest only for 364 days. OK, not much in practice, but the sort of thing they should get right. After the usual incomprehension from the first-line numpties, I eventually got someone who does understand basic interest calculations. It appears that Nationwide's systems were confused because I opened the bond by transfer from an instant access ISA. On day 1, 31 March 2009, they opened the bond, opening balance zero, and also on day 1 credited the capital and closing interest transferred from the instant access ISA. The algorithm then thought that interest should start running only from day 2.
Readers, check your bank's interest calculations! (though that is not easy if the balance changes).
The Nationwide person was unable to explain how they can get something so basic wrong, but did agree to pay me £25 compensation.

david78

When did they send you the notification YoungNick. I'm still waiting for mine and it Matures 2 April.

System

david78 wrote: »

When did they send you the notification YoungNick. I'm still waiting for mine and it Matures 2 April.

They sent mine dated 5 March. In your case, note that they capitalise interest on fixed-term ISAs on 31 March. So, unless you are having the interest paid out to another account, your nightly interest amount will (marginally) increase for the nights of 31 March/1 April and 1/2 April. It will be interesting to see if they get it right. Since their systems aren't properly programmed for simple interest, they may struggle with compound!

david78

Thanks YoungNick. I have not received my letter yet so will chase it up with them.

I was expecting interest to be added on the 31 March and a little more to be added on 2nd when it matures.

My main concern is to get the application back to them for what to do with the maturing FRISA (I'm hoping the 4.4% 3y FRISA is an option) as I don't want it going into their instant access account (even for a few days while I arrange to move it).

Georges_Mum

Don't bother going into branch and explaining beforehand what you wish to do with the proceeds......they don't bother with that..and put it into a capital builder account. When you phone to question it and put it right......they still get it wrong!!